Phil Hogan (Carlow-Kilkenny, Fine Gael)

The EU-IMF programme of financial support for Ireland contains a commitment to introduce a property tax for 2012. The programme reflects the need, in the context of the State's overall financial position, to put the funding of locally-delivered services on a sound financial footing, improve accountability and better align the cost of providing services with the demand for such services. It was considered that in light of the complex issues involved, a property tax would take time to introduce, considering no database of properties exists. In order to meet the requirements in the EU-IMF programme, the Government decided to introduce a household charge in 2012 as an interim measure.

By international standards, the revenue base of local authorities in Ireland is relatively narrow, with local authorities being disproportionately dependent on central government funding. The introduction in 2009 of the non-principal private residence charge represented an important step change in how local government is financed and was the first dedicated new source of funding for local authorities in some years. It did not, however, go far enough in addressing the imbalance in the sector's financing. A more effective broadening of the revenue base for local government will be achieved by the household charge this year in the fullness of time by the full property tax.

In February 2012, an independently-chaired inter-departmental expert group was established to consider the structures and modalities for an equitable valuation-based full property tax. The group has recently completed its work and submitted its report to me. I will now be considering the approach to the report in consultation with my Government colleagues.

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